»Profit Hunter by Equitymaster

On This Day - 6 FEBRUARY 2020
How to Become a One Stock Crorepati

Richa Agarwal, Research analyst

Do you ever wish you had the wealth of the world's richest investor, Warren Buffett? If so, then you're not alone. Many of us dream of being rich.

But how many work towards making those dreams a reality?

What stops most individual investors from dreaming of riches is their belief that they need a lot of money to start this journey.

What if I told you investing even small amounts in great businesses can create immense wealth over the long-term?

Think about the simple story of the thirsty crow...

In the story, a thirsty crow couldn't reach the water at the bottom of a pitcher because his beak was too short.

Being the clever crow that he was, he flew away and returned with a stone and placed it in the pitcher. He noticed the water level rising ever so slightly.

He repeated this several times. He placed stone after stone in the pitcher until finally, the water was high enough to reach with his beak.

The crow's physical inability can be compared to an investor's financial limitations. By taking the right approach, it's possible to get rich in the stock market, even with initial financial constraints.

You need not invest in a good stock at one go. Also, you don't need to invest in any unknown, risky entities.

You need to buy one good business, at any stage of its life cycle, that's well managed.

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Just make sure you buy the stock with a reasonable margin of safety.

For example, let's say you bought 30 shares of Page Industries when we recommended it in Hidden Treasure in 2009. You would have had to invest Rs 9,150. That's not a very large sum.

Those 30 shares would be sitting pretty in your portfolio today. They would have a market value of Rs 612,000, having multiplied over 66 times!

But what would have been even better is if you would have consistently bought the stock when it was trading cheap.

So you see dear reader, investing can be simple.

To get rich in the stock market, it takes very few good decisions as long as you avoid bad decisions.

The key is to be selective about what you buy. Focus on solid companies selling great products or services to their clients rather than pipe dreams promising instant riches.

In other words, you don't need to invest crores to make crores. You can do so even with small, consistent investments.

Historically, that recipe has produced more crorepatis than almost any other strategy. Stock trading and trying to time the market can make for some interesting diversions.

But it's not how big, sustainable money is made.

The point I am making today is this...

You don't need to be Warren Buffett to make a fortune in the stock market.

You can make crores - even with small investments - if you buy the right stocks.

In fact, the gains in many Hidden Treasure recommendations - Page Industries, NIIT Technologies, Can Fin Homes, City Union Bank, and Balkrishna Industries - have been strong enough to realise this crorepati dream.

But are these 'crorepati' stocks so easy to find?

No, of course not. If it was that easy everyone would be crorepatis. There are only a few crorepati stocks in the market.

In fact, it has taken me many years and a lot of study to figure out what goes into making a stock a 'crorepati' stock.

So how does one go about picking out 'crorepati stocks'?

I've found a formula that could predict the perfect stock, one that has the potential to make crores in the coming years.

The formula consists of three critical characteristics for zeroing in on individual stocks that have what it takes to make one a crorepati.

In fact, I will explain these for you in my 'One Stock Crorepati' MEGA summit on 11th February - just click here to save your seat and I'll remind you when it's happening.

But there's more...

You see, knowing the three characteristics to spot a crorepati stock is just one part of the game...

The other part is catching the stock at the right low price - so that when its stock price begins shooting up - you can go along for the ride...

And I am writing to you today because...

I have discovered a 'crorepati stock' which is at a bargain price right now.

Because the environment to pick such stocks is so favourable right now, I have not only discovered the perfect stock, but it is the right time to load up on this stock...

This company is a high return business, with relatively low risk, and with solid management at the helm of its affairs.

Over the years the company has shown that it can not only survive disruption. But continuously innovate to keep itself ahead of the curve.

Most importantly, this company has all the three critical elements that make the cut to become a star in a crorepati stock portfolio.

I'll take it one step further and share details of this little-known Indian company - a 'crorepati stock' which has just positioned itself to offer what may be one of the most brilliant opportunities of the decade...

Warm regards,

Richa Agarwal
Richa Agarwal
Editor, Hidden Treasure
Equitymaster Agora Research Private Limited (Research Analyst)

PS: Existing Hidden Treasure subscribers can access the report here. For everyone else, you can also have the chance to get this stock recommendation - simply click here and sign up for a free seat at Richa's 'One Stock Crorepati' MEGA summit on 11th February.

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